Forcing vagrants to go to work to keep inflation down? That's the other way around.

First of all, the idea of forcing vagrants to go to work is a funny idea. There's some extremely sh.... as soon as one begins to look at these issues, there's many many questions that ought to be raised: for example, take the idea that welfare mothers have to be driven [forced] to work. First of all, they're not vagrants, you know, the idea that welfare mothers have to be driven [forced] to work that, you know, you're not allowed to question that; it's supposed to be a consensus. What does that mean? That means if you're raising a child, that you're not working? I mean, how many... I don't know how many people around here are inclined to agree... [Applause]

The fundamental assumption is that if it's the kind of work that women are doing, then it isn't work. Okay, now, you know, on, that's in.... if you think it through, it leads in interesting directions: this is supposed to be a meritocratic society; we're very proud of it, so you measure the value of work by the amount of pay you get. Well if you're raising a family and raising children and keeping it going and so on, the amount of pay you get is zero. Okay, so that is totally worthless, you know, that is: raising children and keeping families alive and so on and so forth, that is worthless. And as a demonstration of that you don't get paid anything for it as a meritocratic society.

Well what is work?

Well, work is the stuff you get a lot of money for, so like it's driving to your office on Wall Street and speculating against currencies in an effort to drive down growth rates. And you get a huge amount of money for that, so that must be really valuable work. So those guys don't have to be driven [forced] to work because they're already doing extremely valuable work, but somebody who is a raising a child has to be driven [forced] to work because they're not doing any work. That's the tacit assumption that underlies all of these things. Well, you know, if you sorta begin following through on those assumptions, then lots of interesting consequences follow.

So the idea that anybody has to be driven [forced] to work is, I mean, you can't even discuss the topic because it begins with utterly outlandish premises about what work is. And I should say even if you pick the craziest University of Chicago hypothesis, that doesn't make any sense even on those grounds, I mean, everyone agrees, every economist agrees: that if you want to be serious, you can't talk about human beings as if they're creatures with rights and so on, you have to talk about them as capital. So there's something called human capital, you know, which means how much a human being can contribute to growth, let's say, that's called human capital, like: you have enough to eat and be strong enough to get out of bed in the morning and so on and so forth, okay, if all that stuff increases, you're increasing human capital. If you want to be serious, you have to talk about it this way.

So what increases human capital? Well, you know, mothers raising children, that's what increases human capital. What's the biggest factor in growth? Human capital. So in fact, you ought to be paying welfare mothers a high salary to try to improve the human capital [Applause] because of the work they're doing. I mean, anyone who's had a child, or thinks for a second, knows that it's work. You know, it doesn't come free. And that's only a piece of it of course. In fact, the whole story unravels completely as soon as you begin to look at it seriously, so that you can't even enter into the discussion about driving [forcing] people to work; however, on the narrow point that you mentioned with regard to inflation, it's supposed to have the opposite effect.

Here there's a serious internal contradiction in the whole story: There's a thing called the natural rate of unemployment, or some name like. That the idea isn't, you know, there's some mythical number, and it keeps changing depending on, you know, what purposes you're trying to achieve. When employment goes above this mystic number, inflation is supposed to go up. There's questions about whether it's good or bad for inflation to go up, but let's say it's bad for the moment. That means you have to keep unemployment up to that number. Well there's another reason for paying people to stay off the labor market, because when they go into the labor market, what they do is drive that number down, and that's bad because that undermines the natural rate of inflation.

The whole thing is such an issue of internal contradictions and absurdities and so on that it's really hard to discuss, and I frankly think that you shouldn't be trapped into entering into the discussion on the premises in which it is pursued, like the premise that says there's somebody raising a child, they're not working. On the other hand, if you're speculating against currencies and making a mint, you are working even though the effect is extremely harmful. The effect is it precisely to drive down growth rates that's the point, okay, and that's just one example.